Month: July 2014

‘Nigeria’s Netflix’ takes Nollywood to a global audience

Dedicated follower of film: Nollywood produces more films per year than any country bar India

An episode of Shuga, a popular soap opera set in Kenya, is playing on a screen at the offices of iRoko TV – an online platform commonly dubbed the “Netflix of Africa”.

In a corner of the room, facing the rest of the operation and separated by a glass partition, sits Jason Njoku, the company’s founder.

Born and brought up in London, Mr Njoku is now Lagos-based and building what is proving to be a revolutionary tool, as Nollywood – Nigeria’s Hollywood – moves on from DVD to digital platforms.

Since 2011, iRokoTV has racked up millions of views, its founder says, “connecting African films with fans globally” with its huge online catalogue.

The company pays filmmakers about $10,000 (£5,900) to $25,000 for the digital rights to stream their content for a period of time.

Inside the iRoko offices in Lagos

In fact, Jason Njoku says the group spends $3m-$4m a year on licensing and producing content, hoping to make back the money in two to three years.

Subscribers pay a monthly fee of $8 with unlimited access to movies from around Africa on the iRoko TV platform, although most productions come from Nigeria and Ghana.

“There’s always that star power thing…similar to Hollywood, similar to Bollywood, similar to any content industry around the world,” says Mr Njoku.

“You look at the stars, you look at the director…super important…you also look at the quality of the actual movies themselves, and we try to sync that with the audience, so, every ten movies we view, we only buy one or two of them.”

It is a model that not many would have thought about a few years ago, but today iRoko’s success has seen the emergence of other competitors.

One, Pana TV, secured the rights to the acclaimed film Half Of A Yellow Sun, which stars Hollywood’s Chiwetel Ejiofor and Thandie Newton.

The industry is growing, and is said to be a major employer in Nigeria, contributing to 1.4% of the country’s GDP.

In a quiet Lagos suburb, three dozen people, most of them in their twenties and thirties, crowd a room in silence, listening to a passionate prayer led by a man in the centre.

As soon as he is done, they disperse and work on the film set begins.

Director’s chair: Obi Emelonye on the set for Nollywood film series The Calabash in Lagos

This is the making of The Calabash, an ambitious 100-episode film series that lawyer-turned-filmmaker Obi Emelonye hopes to get on-screen, including on iRokoTV, before the end of the year.

“It’s a very tasking, almost stupid episode to film 100 episodes in a go without $1bn, but we can show that with a good story, with dedication, with a committed cast and crew, with a bit of luck, you can achieve great things,” says Mr Emelonye, with a smile.

A power cut darkens the room and filming pauses.

In less than a minute a generator outside the building drones into life, the lights come back on, and production continues almost as if nothing happened.

Shop till you drop: Nollywood movies are sold as DVDs in shops and markets across the country

The challenges on set are evident, but when the production is complete there are even greater challenges getting the films out to the viewers while still paying the filmmakers.

Nigeria’s film industry churns out some 50 films a week, surpassed only by India’s Bollywood.

Most of these are released on DVD, and sold cheaply on the streets around Nigeria, although the industry has now garnered a huge following across Africa and among Afro-Caribbean communities around the world.

But this is not necessarily good news for the filmmakers.

“Distribution is the biggest problem for Nollywood,” says Mr Emelonye.

“DVD is dying out and since we are still dependent on DVD then our industry suffers.”

This nation of 160 million people only has about 14 functional cinemas, which mostly screen Hollywood blockbusters.

Weaving one’s way through a sea of human traffic in the Idumota section of Lagos Island, one of the older parts of the city, you see a series of shops peppered with posters of Nollywood titles like Funke The Illiterate and Brazil Return.

The DVD market is still thriving and there’s hardly a better example of this than in Idumota.

“Some films sell out very quickly… as soon as people know who the actor is they come and buy the copies,” says Kelechi Kene, a vendor.

He adds that although he has heard of digital platforms like iRoko, they do not pose any threat to businesses like his which sell films on DVD.

Filmmakers fear that outlets like these are not properly regulated and so pirates can use them to make a fortune.

Despite the growth and success of digital innovation observers feel the sector is far from achieving its potential without proper legislation on rights and distribution.

“We need to be able to buy these films online because the filmmakers need to make their money back and they are not doing that right now. Having said that, we see these platforms going beyond hosting films to now creating their own content, which is a good thing”

Connectivity is still a major problem for many viewers, with erratic internet connections that are still not affordable for most Nollywood fans.

Pay TV is also taking a large share of the viewership.

Africa Magic, for example, now has several channels that air African content including productions in Yoruba, Hausa and Swahili.

Despite their popularity, iRoko’s Jason Njoku doesn’t see them as competition.

“We have films that people can watch whenever they feel like, and pause, rewind or skip,” he says.

“You can’t do that with TV and that’s why we feel there’s so much to achieve here.”

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Gov. Jerry Brown’s visit to this sprawling metropolis has all the hallmarks of an official state visit. He’ll sign agreements with foreign officials, encourage businesses to invest in California and perhaps tour some of the city’s cultural landmarks.

In two late additions to his packed agenda, Brown is also scheduled to meet privately with the Mexican president Monday and address the immigration controversy roiling American politics Tuesday.

But unlike other state functions, taxpayers won’t be paying for Brown’s four-day trip. Instead, it’s funded by scores of delegates, including business leaders and lobbyists who paid $5,000 each to travel with the governor.

I think they and we would use opportunities to bring up those issues as long as it’s in good taste.– Los Angeles Area Chamber of Commerce President Gary L. Toebben

The crew includes solar company executives exploring Mexico’s energy industry, farmers seeking new markets for their products and some of Sacramento’s most influential advocates, like former lawmakers Rusty Areias and Fabian Núñez. There’s even a tech company, Lyft, a ride-sharing app that matches drivers and passengers with smartphones.

Businesses and organizations hope the governor’s presence in Mexico, California’s biggest export market, will help foster money-making opportunities with local companies and government officials.

The trip could also give them an edge back in the Capitol, providing the opportunity for valuable face time with the governor and his wife — one of his closest advisors — nearly 2,000 miles away from Sacramento.

For example, the Los Angeles Area Chamber of Commerce has been lobbying Brown to support a new film tax credit to help keep production jobs in Southern California. The organization’s president, Gary L. Toebben, is part of the trip and expects delegates to have “side conversations” about Sacramento topics.

“I think they and we would use opportunities to bring up those issues,” he said, “as long as it’s in good taste.”

Lyft doesn’t have any immediate plans to start operating in Mexico, but it is fighting legislation in the Capitol that would place new rules on the company, which competes with the taxi industry.

Michael Masserman, Lyft’s director of international government relations, said he’s not planning to lobby Brown during the trip. Still, he hopes a few days in Mexico City “will help us deepen the relationship we already have with members of the governor’s team.”

Masserman and others had a chance to start doing just that Sunday evening at a reception in Polanco, a downtown Mexico City district where the delegation is staying.

All told, nearly half of the roughly 100 delegates representing companies and industry organizations on the trip have spent money lobbying in Sacramento this year, according to records filed with the state. They’ve also provided almost $250,000 toward Brown’s reelection effort, which has banked $22.3 million so far.

The funding arrangement for Brown’s trip to Mexico is the same as his trade mission to China last year. At that time, he dismissed concerns about people traveling all the way across the Pacific Ocean to lobby him.

“I am easy to get a hold of,” he told reporters during a ride on a Chinese bullet train. “You don’t have to give to my art school or come on a train. I’m around.”

It’s not just Brown who’s getting a free ride from companies and lobbyists. Delegate fees are also covering costs for members of his administration, including the chair of the powerful Air Resources Board and the state transportation secretary.

Asked about the funding, Brown spokesman Evan Westrup said, “This trip is a unique opportunity to strengthen economic and environmental ties with Mexico and bolster trade and investment in our top export market — a benefit to all of California — without burdening taxpayers.”

Tracy Westen, chief executive of the Center for Governmental Studies, called the arrangement “outrageous.” Any taxpayer savings would dissipate, he said, if a lobbyist secures a tax break or other favorable treatment during the trip.

“It creates a very unpleasant appearance,” he said. “And that’s why it should be avoided. This is the kind of thing that undermines public confidence in government.”

Jessica Levinson, a professor at Loyola Law School, said that changing how the trips were funded wouldn’t stop special interest money from flowing to politicians in other ways.

“I don’t see a perfect solution here,” she said.

William Gould, the chief technology officer at SolarReserve, said he didn’t think delegate fees will change Brown’s mind on anything.

“The fee is so small,” he said. “I don’t think it will make him beholden to us.”

It creates a very unpleasant appearance. And that’s why it should be avoided. This is the kind of thing that undermines public confidence in government.– Tracy Westen, chief executive of the Center for Governmental Studies

His company, which helps develop solar power plants, is hoping for new opportunities in Mexico, and thinks Brown’s presence will help.

“He’s very prominent, so it’s probable we’ll have a better quality of interaction with local officials,” Gould said.

Bob Roberts, president of the California Ski Industry Assn., said these kinds of trade missions can pay off with serendipitous moments at events that attract movers and shakers.

During a similar trip roughly two decades ago, he was at a reception in London when “in walked a guy named Richard Branson.” Soon enough, there was a partnership with the entrepreneur’s vacation package company, Virgin Holidays, that has helped shuttle skiers and snowboarders from the United Kingdom to California slopes.

He’s hoping for similar luck with attracting Mexican tourists, who sometimes choose resorts in Colorado instead of California.

“This is not a lobbying opportunity,” Roberts said. “This is a chance to market.”

Fifteen lawmakers are also on the trip. Several of them, including incoming Senate leader Kevin de León (D-Los Angeles) and Latino caucus chairman Sen. Ricardo Lara (D-Bell Gardens), are using campaign funds to pay for their travel.

For delegates, the $5,000-per-person fee also provides them with a colorful guide to the trip and Mexico City.

Travelers who might be accustomed to California’s casual style are encouraged to dress more formally, with “conservative dark suits” for men and shirts in “classic colors.” Writing down someone’s name in red ink is also considered bad luck.

Other advice may leave Californians feeling at home — the guide says not to be surprised if an earthquake rattles downtown Mexico City.

Nigeria has the potential to be one of the world’s top 20 economies by 2030 with a consumer base exceeding the current populations of France and Germany, according to McKinsey & Co.

Africa’s biggest economy may expand about 7.1 percent a year through 2030, boosting gross domestic product to $1.6 trillion, possibly pushing it above Netherlands, Thailand and Malaysia, the New York-based company said in a report today. About 60 percent of Nigeria’s estimated population of 273 million by then may live in households earning more than $7,500 a year, fueling a consumer boom, McKinsey said.

“Nigeria has a very positive outlook,” Acha Leke, co-author of the report, said in an interview with BloombergTV Africa in Johannesburg. “The most important thing that needs to be done to get it there is execution” of government policies.

As Africa’s largest oil producer with a population of about 170 million, Nigeria has consistently posted annual growth rates in excess of 4 percent over the past decade. That’s spurred foreign investors such as Unilever Plc (ULVR), Nestle SA (NESN) and Shoprite Holdings Ltd. (SHP)to expand operations despite an upsurge in violence by militants in the north.

Based on McKinsey’s growth estimates for the economy, annual sales in consumer goods could more than triple to $1.4 trillion by 2030 from $388 billion currently, it said.

Retail Boom

The retail and wholesale trade industry will probably become the largest contributer to Nigerian growth by then and 35 million households are expected to earn more than $7,500 a year, according to the report.

While oil accounts for 70 percent of government revenue and most of Nigeria’s export earnings, its share of the economy has waned. After the statistics office overhauled its GDP data in April, oil’s contribution to economic growth between 2010 and 2013 was 5.1 percent, compared with 14 percent for manufacturing and 20 percent for trade, according to McKinsey.

McKinsey’s estimate of Nigeria’s growth potential comes with significant caveats. The government needs to address poverty, lower the cost of basic services, such as housing and energy, expand electricity supply and boost productivity in farming, according to the report.

Stability Risk

“If execution doesn’t happen there’s actually a big risk for the country, even from a security stability perspective, to create jobs and lift millions of people out of poverty,” Leke said. “That has to be a big focus, to grow in a way that is inclusive.”

The most recent poverty survey by Nigeria’s statistics agency, published in 2012, showed that 61 percent of Nigerians were living on less than a dollar a day in 2010, up from 52 percent in 2004.Life expectancy is 54 years, eight years lower than in Ghana and 20 years below Brazil, according to McKinsey.

“The policy world, economists can build all manner of scenarios,” Folarin Gbadebo-Smith, managing director for Lagos-based Center for Public Policy Alternatives, said by phone. “It’s a totally disconnected discussion between what we can be and what we will be.” The outcome “depends on what our government does,” he said.

U.S. multinational investment banking company Goldman Sachs has become a partner in Turkey’s largest integrated port, operated by petrochemicals maker Petkim, in a deal that will boost the company’s plans to develop the port to make it largest of Aegean region.

Petkim has announced that it has reached a preliminary agreement to sell its 30 percent stakes in Petkim Limancılık (Petlim) for $250 million, after months of talks that started in February this year.

Petkim and Petlim are controlled by the Turkish branch of Azeri energy giant Socar. Petlim was founded to deal with the economic operation of Petkim’s port in the Aliağa district of the Aegean province of İzmir.

“One of the world’s biggest investors becoming a partner to our port company means approval of the value and economy of our project,” Socar Turkey President Kenan Yavuz said, speaking after a ceremony to mark the signing of the deal as well as a preliminary financing agreement with Turkish lender Akbank for the port project.

“We have signed a preliminary agreement for our port investment’s project financing with one of Turkey’s largest banks Akbank. We will secure $211 million in financing with a 13 year maturity within the term-sheet,” Yavuz said.

“We’re very glad to realize the share transfer deal with a global giant such as Goldman Sachs and the project financing agreement with Akbank on the same day,” he added.

The investment, which will become Turkey’s third container port, will become operational in the last quarter of 2015, Yavuz also said.

The Petkim Container Port, which for the first time in Turkey will enable the berthing of ships with 11,000 TEUs, will possess a starting capacity of 1.5 million TEUs. A logistic field with a total of 48 hectares will be created, with 42 hectares in the port field for container storage and 6 hectares in the rear service area.

Socar Turkey also plans to build a refinery on the Petkim Peninsula with the aim of integrating refinery, petrochemical and logistical operations at the site.

The company is building the $5.5 billion Star refinery in partnership with Turcas Petrol to supply feedstock to Petkim and cut Turkey’s dependence on imported refined products.

Socar Turkey signed a $3.3 billion credit deal for the refinery in June, marking Turkey’s largest and longest-term financing deal for its first privately built oil refinery.

(Reuters) – Nigeria forecasts its economy will grow by at least 6.2 percent this year following a solid first-quarter performance, the statistics office said on Tuesday.

That would be faster than growth last year, which was revised down to 5.5 percent last week.

Nigeria overtook South Africa as Africa’s largest economy in April, after a rebasing of its calculation almost doubled its gross domestic product to more than $500 billion.

In the first quarter of 2014, the Nigerian economy also expanded by 6.2 percent from a year earlier, driven by its services sector, which offset a drop in oil production, the statistics office said on Tuesday.

“The first quarter is always the quarter with the slowest growth … because it’s the beginning of the planting season and consumers tend to spend less,” Director General of the National Bureau of Statistics, Yemi Kale, told Reuters.

The first-quarter performance was slightly slower than a 6.8 percent annual expansion in the final three months of 2013.

The services sector, which accounts for half of GDP, expanded by 7.2 percent in January-March from a year earlier, decelerating from an 8.7 percent rise in the previous quarter.

Crude production fell to 2.26 million barrels a day in the first quarter, from 2.29 million barrels per day a year ago, due to pipeline shutdowns and oil theft.

Most governments overhaul GDP calculations every few years to reflect changes in output, but Nigeria had not done so since 1990, so sectors such as e-commerce, mobile phones and its prolific “Nollywood” film industry, had to be factored in.

After a bitterly-fought campaign, Jakarta governor Joko Widodo and his rival, ex-general Prabowo Subianto, both used different unofficial tallies to claim they had won on Wednesday.

Most credible counts showed Widodo in the lead, sparking a rally in stocks and the rupiah Thursday on the expectation that he will be declared the winner when official results are announced later this month.

But the initial euphoria quickly wore off. The Jakarta stock market slumped as much as two percent the following day, and was 1.3 percent down at the close as investors grew nervous about the potential for a prolonged deadlock.

“Given the conspicuous absence of a concession, the market still cannot rid itself of the spectre of draggy uncertainty for a while more,” said economist Wellian Wiranto, from Singapore’s OCBC Bank.

Investors favour Widodo, known by his nickname Jokowi, as he is seen as a potential reformer and a clean leader in one of the world’s most corrupt countries.

Indonesian presidential candidate Joko Widodo addresses a government conference on world oceans day …

Prabowo, a top military figure in the era of dictator Suharto, has struck a fiercely nationalistic tone on the campaign trail, and is looked at warily by markets.

– Fears of violence –

The election commission is expected to announce the official results on July 22 but the loser may contest them in the Constitutional Court, which has until the end of August to make a ruling.

It is not a good time for Indonesia to be hit by uncertainty that could scare off investors, as it undergoes a painful transition from a decade of rapid growth fuelled by high global prices for its abundant commodities.

Falling commodity prices, as well as a series of protectionist policies, have hit the economy, which expanded at 5.21 percent in the first quarter — its slowest pace since late 2009.

Foreign investment has also slowed steeply, with investors wary of the uncertain business environment. Corruption, seen as a major obstacle to operating in Indonesia, remains rampant.

The political uncertainty caused by the election deadlock can only add to the gloomy picture, observers warn.

The Jakarta Post newspaper, which has backed Widodo, warned in an editorial that taking the battle all the way to the Constitutional Court “would prolong the political stalemate and uncertainty until late August”.

“The prospect of violence would dramatically increase unless leaders of political parties work to control their bases of support. The market would roil in response to these destabilising developments,” it said.

Indonesia was rocked by violence before the downfall of Suharto in 1998 following his three-decade dictatorship, with many killed in the capital Jakarta during rioting and looting.

The country has enjoyed a decade of relative peace and stability under the presidency of Susilo Bambang Yudhoyono, helping to transform it into one of the world’s fastest-growing economies and a major investment destination.

But fears are growing that the rising political tensions could spark fresh unrest, and Yudhoyono has called on both sides to restrain their supporters.

Analysts warn that the uncertainty could also hit domestic demand in the rapidly growing middle class, a key driver of growth in recent years.

“A disputed result will not just have market implications, but also likely a dampening impact on sentiment,” said Australia’s ANZ Bank in a note.

“A Jokowi presidency is likely to be aligned with more optimistic consumers whereas a Prabowo challenge could dampen sentiment and spending.”

Investors are hopeful for a quick end to the stalemate, with Widodo being declared the official winner later this month and Prabowo graciously conceding defeat.

But it is still far from clear how the crisis will play out, and most analysts think it is likely that Prabowo — who has been seeking the presidency for the past decade — will challenge the result in court if he loses.

“As much as the market is hopeful that the political drama has ended, we note that there are still alternative final episode scripts that cannot be totally ruled out,” said OCBC’s Wiranto.

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LAGOS (Reuters) – Nigeria’s ARM Infrastructure is close to raising $250 million in the country’s first infrastructure fund, to invest in transport, energy and utility sectors across West Africa, with much of the money coming from pension funds, its managing director said.

ARM said the fund was expected to close by mid-August and was at the documentation stage with various investors including some Nigerian pension funds and other institutional investors such as the African Development Bank, Opuiyo Oforiokuma said.

Nigeria, Africa’s most populous nation and home to 170 million people, requires around $50 billion a year for the next decade to develop badly needed infrastructure, especially for power, roads and water, to help boost economic growth.

Nigeria’s pension assets have grown to $25 billion in 2014, from under $4 billion seven years ago, as the government targets schemes to try to encourage domestic savings. But the funds have traditionally invested in debt and equity portfolios.

“We are setting up a new infrastructure fund … (The) target fund size is $250 million. This will be the first time pension funds are actually going to invest in infrastructure,” Oforiokuma said on the sidelines of a pension funds conference in Abuja.

ARM is a financial services firm with interests in real estate, insurance and capital markets. It developed Nigeria’s first toll road under a private-public partnership in the commercial hub of Lagos.

The fund will target equity stakes in airport and sea port projects across West Africa, and invest for a period of 12 years, targeting investment returns of 18-20 percent over the period.

“We don’t have basic roads, power supply and water. All of these have significant consequences for the economy, the social well being (of Nigeria),” Oforiokuma said, adding that Nigeria generates around 4,000 megawatts of electricity, compared with Brazil, which generates 100,000 megawatts.